Oil Extends Decline on US Recession Concern, Inventory Build
(Bloomberg) -- Oil fell for a second day as concerns over a US recession deepened and figures pointed to another build in inventories, eclipsing optimism that China’s dismantling of Covid Zero will aid demand.
West Texas Intermediate dropped below $79 a barrel after declining almost 1% on Wednesday as US retail sales slowed, stoking concern over a potential slowdown. The American Petroleum Institute reported commercial stockpiles grew by 7.6 million barrels, according to people familiar with the figures.

Crude has endured a shaky start to the year, collapsing by 10% in the opening two sessions on slowdown concerns only to rebound as the positives from China’s reopening dominated the trading narrative. Global consumption will reach a record daily average in 2023 with Asia’s largest economy leading the way, the International Energy Agency said in its latest outlook this week.
“Prices appear to have peaked for now and might be due for a small correction,” said Vishnu Varathan, Asia head of economics and strategy at Mizuho Bank Ltd. in Singapore. “The weak US data and signs of inventory build should temper, not terrify, markets as they are being interpreted in light of a more optimistic economic environment.”
Reinforcing the IEA’s bullish outlook, Saudi Aramco said that it was optimistic that consumption will increase as China recovers and air travel rebounds. Separately, traders are also waiting for clues on Russia’s production and exports when sanctions on refined fuels take effect early next month.
Time spreads are showing a mixed picture. While global benchmark Brent’s prompt spread — the difference between its two nearest contracts — is holding in contango, longer-dated differentials, including the three-month figure, remain in the opposite bullish backwardated structure.
Elements, Bloomberg’s daily energy and commodities newsletter, is now available. Sign up here.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
KEEPING THE ENERGY INDUSTRY CONNECTED
Subscribe to our newsletter and get the best of Energy Connects directly to your inbox each week.
By subscribing, you agree to the processing of your personal data by dmg events as described in the Privacy Policy.
More oil news

Stocks Slide as Tariff Angst Adds to Price Worries: Markets Wrap

China’s Oil Teapots Cut Runs to Pandemic Levels After Sanctions

China Refiners Set to Resell US Oil Cargoes After Tariff Blitz

Shell starts up new facility in UK North Sea, restoring production from the Penguins field

Oil Falls to Lowest Settlement Price of 2025 as Traders Flee

Oil Falls After Trump Delays Canada, Mexico Tariffs by a Month

Wright Confirmed to Lead Energy Agency Key to Trump’s Plans

Oil Rises as Trump Slaps Tariffs on Biggest Crude Supplier to US

UAE’s Adnoc Aims to Buy Nova Chemicals, Roll Into Deal With OMV
